Following a good set of 3Q19 results from CSE Global, analysts have updated their reports, as follows:
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Broker |
Analyst |
2019 Forecast Revenue |
2019 Forecast Net Profit |
Target stock price |
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Ling Lee Keng |
$429 m |
$22.5 m |
69 c |
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Joohijit Kaur & John Cheong |
$424.3 m |
$22.0 m |
70 c |
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Cezzanne See |
$407 m |
$22.52 m |
73 c |
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Joel Ng |
$420.6 m |
$21.4 m |
61 c |
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In 2018, CSE achieved $377 m in revenue and $20.1 m in net profit attributable to shareholders. |
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MD Lim Boon Kheng at the 3Q19 results briefing last week. Photo by Ngo Yit Sung.
Excerpts from DBS Research report
Analyst: LING Lee Keng
| New order intake picking up Higher order book to drive earnings for FY20F and beyond. New order intake almost doubled y-o-y, more than we anticipated, on the back of an increase in oil production in Americas.
With its increase in oil & gas projects, and large contract win announced recently, we anticipate this to contribute positively to CSE’s earnings in FY20F and beyond. |
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We project FY19F-21F earnings CAGR of 21% for CSE, driven by the expected increase in capex of oil majors, and riding on the smart nation initiatives in Singapore and increasing infrastructure projects in Australia.
About 90% of CSE’s total revenue is generally recurring in nature. This stable stream of revenue, coupled with its high customer retention rate and strong operating cashflows, should support a consistent DPS of c.2.75 Scts p.a., or an attractive yield of c.5%.
Where we differ: We are more optimistic on the outlook for CSE, on the back of higher new order wins driven by continued increase oil production in the US.
Potential catalysts: 1) Large contract wins, 2) Rising oil prices
Our TP is raised to S$0.69 from S$0.65 on the back of higher new order intakes. Our TP is pegged to 5-year average PE of 12x on FY20F earnings. Key Risks to Our View: Steep drop in oil prices, global macroeconomic slowdown, lack of new order wins. |
Full report here.
